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Tue 9 Jun 2009 09:18 PM

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Qatar's $2.6bn Energy City sees tenants in 2010

Infrastructure 70% complete, 25 to 50% of construction contracts awarded by end-2009.

Qatar's $2.6bn Energy City sees tenants in 2010
ENERGY CITY: First tenants set for Qatars Energy City in 2010. Completion is due in 2012. (Getty Images)

Qatar's Energy City, a $2.6 billion property development aimed at attracting international energy companies, expects tenants to start moving in next year, the company's chief executive officer said on Tuesday."We expect the first building to start operating by the end of next year," Hesham Al-Emadi said in a telephone interview. "Infrastructure is 70 percent complete and 25 to 50 percent of the construction contracts are to be awarded by the end of this year."

Energy City is part of a new city that is being developed by Qatari Diar, the property wing of the country's sovereign wealth fund, the Qatar Investment Authority.

Qatar, the world's biggest exporter of liquefied natural gas, is spending billions of dollars on real estate projects as part of plans to curb reliance on oil and gas income, which contributes 60 percent of gross domestic product and 66 percent of state revenues.

Total work in Energy City, which will house the headquarters for the state-run Qatar Petroleum and other national energy and petrochemical companies, is expected to be completed by 2012, Emadi said.

"We expect to attract big players in the market - such as Exxon Mobil and Royal Dutch Shell - to open their regional headquarters in the city," Emadi said.

Exxon Mobil is the biggest foreign investor in Qatar, with stakes in the country's biggest LNG trains.

Royal Dutch Shell is building in Qatar the world's biggest gas-to-liquids plant, which produces clean fuels.

Qatar, which holds the world's third largest gas reserves after Russia and Iran, plans to double its LNG output in 2009 to 62 million tonnes per annum and hit a target of 77 million tonnes in 2010.

Libya, Kazakhstan, and India each are planning multi-billion dollar energy cities as part of plans to attract energy companies and create new sources of income for their economies.

The global financial crisis has hit Qatar's property market with house prices falling as much as 30 percent in the last six months, but high demand will limit price weakness, real estate services company Jones Lang LaSalle said in May. (Reuters)

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